Employers Ins. Co. of >Wausau> v. Rick
Concrete Construction















Filed 3/8/13 Employers Ins. Co. of Wausau v. Rick Concrete Construction CA4/1

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>NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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California Rules of Court, rule 8.1115(a), prohibits courts and
parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.



COURT
OF APPEAL, FOURTH APPELLATE DISTRICT



DIVISION
ONE



STATE
OF CALIFORNIA






>

EMPLOYERS INSURANCE COMPANY OF WAUSAU, Plaintiff, Cross-defendant and Appellant, v. RICK CONCRETE CONSTRUCTION, INC., Defendant, Cross-complainant and Appellant; Putzmeister America, Inc., Defendant and Respondent, LEXINGTON INSURANCE COMPANY, Intervener and Respondent.

D058134 (Super. Ct. No. 37-2007-00071934- CU-IC-CTL)

APPEALS
from a judgment and orders of the Superior
Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">San Diego
County, John S. Meyer, Judge. Affirmed in part, reversed in part.

INTRODUCTION

Rick
Concrete Construction, Inc. (Rick Concrete) appeals, and Employers Insurance
Company of Wausau (Wausau) cross-appeals, from a judgment of the trial court
resolving a dispute between the parties regarding Wausau's handling of third
party liability and first party physical damage claims under a business auto
policy issued by Wausau. The parties'
dispute arose from a February 2006 fatal accident at a construction site in Murrieta,
California, involving concrete pumping
equipment leased by Rick Concrete.

The trial
of this action occurred in two phases.
The first phase, tried to the court in July 2008, involved Wausau's
claims for declaratory relief regarding preliminary coverage issues, including
whether the equipment involved in the accident was a covered "auto"
under Wausau's policy, and whether
the "operations" exclusion of the policy applied. The second phase, tried to a jury in March
2010, involved Rick Concrete's cross-claims for damages based on, among other
allegations, Wausau's alleged
breach of contract, bad faith and fraud in the handling of Rick Concrete's
insurance claims.

As reflected in the July 1, 2010 judgment, the trial court
determined in the declaratory relief action that the equipment involved in the
accident was a covered "auto," and the policy's
"operations" exclusion did not apply. During the second phase of the trial, the
court further ruled that Wausau
brought the declaratory relief action reasonably and with proper cause. That ruling, and the trial court's order
directing a verdict on Rick Concrete's fraud and misrepresentation claims,
narrowed the cross-claims to those alleging Wausau's breach of contract and bad
faith in making untimely payments on Rick Concrete's first party physical
damage claim. In its special verdict
issued after trial of the second phase of the case, the jury found that Wausau
breached its contract with Rick Concrete by failing to properly pay the first
party physical damage claims. The jury
also found that Wausau unreasonably
delayed the first of its two payments to Rick Concrete for the cost of repairs
to the equipment damaged in the accident.
However, the jury found that Wausau
did not unreasonably delay the second payment for damage to the equipment—a
payment Wausau made only after the
trial court determined that Wausau
was liable not just for Rick Concrete's actual costs of repair, but for its
reasonable costs of repair.

Rick
Concrete appeals various evidentiary rulings made during the trial of its
claims, as well as the trial court's grant of a directed verdict on its fraud
and misrepresentation claims. Rick
Concrete also challenges the use of the special verdict form that divided the
jury's bad faith findings between the separate first party payments, as well as
the jury's finding regarding the second payment, asserting the latter is
unsupported by substantial evidence.
Additionally, Rick Concrete contends the trial court abused its
discretion in awarding it only $195 in attorney's fees, as allowed under >Brandt v. Superior Court (1985) 37
Cal.3d 813 (Brandt fees). Finally, Rick Concrete asserts the trial
court erred in denying prejudgment interest applicable to Wausau's
belated second payment on the first party physical
damage claim.

Wausau,
in its cross-appeal, challenges the trial court's finding that coverage existed
under Wausau's business auto policy
for what Wausau contends was a
construction accident covered instead by a general liability policy issued to
Rick Concrete by another insurer. Wausau
also argues the trial court erred in denying its request for reimbursement of
expert fees pursuant to Code of Civil Procedure section 998, subdivision
(c)(1).

For the reasons detailed below, we
conclude the trial court erred in denying Rick Concrete's request for
prejudgment interest. In view of that
decision, the trial court's order taxing costs is vacated and this matter is
remanded for further proceedings consistent with this opinion. In all other respects, we affirm the trial
court's judgment and posttrial orders.

FACTUAL
AND PROCEDURAL BACKGROUND

A. The
Wrongful Death Suit and Wausau's
Declaratory Relief Action

On March 13, 2007, a complaint for href="http://www.mcmillanlaw.com/">damages was filed against Rick Concrete
and others entitled Guillen, et al. v.
Rick Concrete Construction, et al. (Super. Ct. Riverside County, No.
RIC467446) (the Guillen action). The Guillen
action arose from an accident that occurred in February 2006. As alleged in the Guillen complaint, Rick Concrete leased a concrete pumper truck
manufactured by defendant Putzmeister America, Inc. (Putzmeister), and brought
it to a construction site in Murrieta, California,
where the vehicle was then parked with three of its outrigger stabilizers
deployed on pavement and the fourth on compacted soil. Jairo Heredia Guillen worked with the
concrete after it was pumped out of the concrete truck's boom onto the
foundation that was under construction.
The pumping of concrete had progressed without incident for some
time. At one point, when the boom was being
extended to reach a different part of the foundation, the ground underneath the
fourth outrigger suddenly gave way, causing the boom to fall on Guillen, who
died from his injuries.

Rick
Concrete promptly tendered defense of the lawsuit to its business auto
insurance carrier, Wausau. Wausau
questioned coverage based on its view that the accident involved construction
risks and not transportation risks.
Nevertheless, it agreed to defend Rick Concrete under a reservation of
rights, and advised that it would file a declaratory relief action to establish
the nonexistence of coverage. Similarly,
Wausau agreed to defend Putzmeister
under a reservation of rights.

Wausau
commenced its declaratory relief action in July 2007, seeking a judicial
declaration that it did not owe a duty to defend Rick Concrete or Putzmeister
in the Guillen action because (1) the
Putzmeister vehicle was not a covered "auto" under the policy; and
(2) the accident occurred during the operation of the concrete pumping boom,
bringing it within one of the policy's exclusions of coverage. Lexington Insurance Company (Lexington),
Rick Concrete's commercial general liability (CGL) insurer, intervened in Wausau's
action. Lexington
had denied coverage under its policy, contending that the vehicle involved in
the accident was an "auto" excluded from coverage under the CGL
policy.

After a two-day bench trial held in
mid-July 2008, the trial court issued a statement of decision in which it
determined that (1) the concrete pumper truck was a covered "auto"
under Wausau's insurance policy, and (2) the "operations" exclusion
of the policy did not apply. The court
found that the truck was not pumping concrete at the time the accident
occurred, but the boom was being relocated to reach a different part of the
foundation. Thus, the accident did not
arise from concrete pumping operations, but rather, "arose out of parking
the unit," and "the shifting of the center of gravity" when the
boom changed position.

B. Rick
Concrete's First Party Physical Damage Claim

In October 2007, Rick Concrete
filed a cross-complaint in the declaratory relief action against, among others,
Wausau and Lexington. The complaint alleged, inter alia, breach of
contract, breach of the covenant of good faith and fair dealing, and unfair
business practices, arising from cross-defendants' alleged failure to properly
investigate Rick Concrete's claims under their respective policies, to defend
and indemnify Rick Concrete in the Guillen
action, and to timely provide it benefits for physical damage to the concrete
pumping equipment. In April 2008, Rick
Concrete's cross-complaint was severed from Wausau's
declaratory relief action and stayed until resolution of Wausau's
claims. That stay was lifted on July 30, 2008, after the order
on Wausau's request for declaratory
relief was issued. In July 2009, Rick
Concrete filed its third amended cross-complaint, from which Lexington
had been dropped as a defendant. Rick
Concrete added claims for fraud and misrepresentation, and focused more
specifically on its allegations that Wausau
had failed to properly investigate the coverage issue and to timely provide
Rick Concrete with first party benefits for physical damage.

The first
party claims arose from Rick Concrete's efforts to repair the concrete pumper
truck, which was damaged during the accident.
A dispute arose between the parties regarding the benefits to which Rick
Concrete was entitled on this claim.
Rick Concrete argued that Wausau
was aware of the physical damage claim shortly after the accident but improperly
delayed investigating that claim. Wausau
argued that Rick Concrete had delayed sending documentation relevant to its
physical damage claims for over two years, and when that information finally
was received, it raised a number of issues regarding Rick Concrete's
claim. Wausau
asserted that it attempted to investigate these issues, but Rick Concrete again
delayed in providing needed information.
In April 2009, Wausau paid
Rick Concrete $55,297.42 for physical damage.
Rick Concrete asserted that it was still owed interest on that payment,
as well as additional sums for labor costs and consequential damages related to
the first party physical damage claim, such as attorney's fees and other costs.

In May 2009, Wausau
moved for an appraisal of Rick Concrete's first party physical damage claim, as
authorized by the business auto policy.
Over Rick Concrete's objection that this relief was neither warranted
nor appropriate, the trial court granted Wausau's
motion, ordered the appraisal, and continued the trial on Rick Concrete's
cross-complaint (which had been scheduled to start that same month).

The
appraisers issued their findings on September
22, 2009. The appraisers
concluded, first, that "the actual total cost incurred by [Rick Concrete]
to repair the damage to the Putzmeister equipment (including all labor,
materials and other expenses) and restore the equipment to its pre-loss
condition amounted to:
$52,719.42." Second, the
appraisers found that if Rick Concrete had hired outside companies to do the
repair and restoration work, "it would have reasonably cost [Rick
Concrete]: $79,716.42." Rick Concrete promptly demanded that Wausau
pay the difference between the amount it already paid ($55,297.42) and the
larger sum stated in the appraiser's findings—a difference of
$24,419.00—arguing that the policy required Wausau to pay the reasonable costs
of repair, and not simply the actual costs of repair. Wausau refused.

C. The
Trial and the Court's Rulings Limiting Rick Concrete's Claims

On March 15, 2010, the first day of
the rescheduled trial on Rick Concrete's cross-complaint, Wausau moved in
limine motion for an order excluding any evidence of the additional first party
physical damage benefits Rick Concrete claimed to be owed (a sum totaling $23,419.00,
after the $1,000 deduction under the policy).
The trial court denied Wausau's motion at that time, but agreed to take
the matter up again later. Wausau
renewed its motion before opening statements, arguing that this was a matter of
policy interpretation the court was obliged to resolve before trial. The trial court ruled that Rick Concrete was
entitled to the reasonable costs of repair, not just its actual repair
costs.

Therefore, Wausau owed Rick Concrete the additional sum of
$23,419.00 (reflecting the $1,000 deductible).
Wausau issued a check for that amount to Rick Concrete the next day.

Wausau also moved in limine for an
order determining that the filing of the declaratory relief action was
reasonable and justified. The trial
court deferred ruling on that issue.

Rick Concrete proceeded to trial on
three main claims arising from its cross-complaint: (1) Wausau acted in bad faith by failing to
conduct a reasonable investigation of Rick Concrete's claim for benefits under
the policy, and by bringing the declaratory relief action without proper cause;
(2) Wausau committed fraud in representing to Rick Concrete that it was
continuing its investigation, when in fact it was not; and (3) Wausau wrongly
delayed paying Rick Concrete benefits for its first party physical damage
claim.

During the trial, Rick Concrete's
president, Robert Matthews, was questioned about the damages Rick Concrete
incurred as a result of Wausau's alleged wrongdoing. The first set of questions pertained to
damages resulting from Wausau's alleged fraudulent conduct, and specifically,
to Rick Concrete's contention that it a) would have downsized the company
earlier but for Wausau's reassurances that it was continuing to investigate the
company's first party physical damage claim, and b) that it had to mortgage
certain property to help its cash flow.
Wausau objected to the latter questions as irrelevant, which objections
the trial court sustained. Wausau also
objected to the questions relating to Rick Concrete's efforts to downsize. The trial court initially overruled these
objections and allowed Rick Concrete's counsel to attempt to lay an evidentiary
foundation for this testimony. When
Matthews was asked how much it incurred in costs related to delayed downsizing,
Wausau objected again on the grounds of relevance and lack of foundation, and
this time, the trial court sustained Wausau's objections. At side bar, Rick Concrete's counsel made an
offer of proof regarding the types and amounts of damage allegedly suffered as
a result of the alleged fraud. The court
disallowed the testimony because no foundation had been laid connecting
Wausau's alleged misrepresentations to those specific damages. The trial court also expressed some concern
as to whether the damages information had been disclosed during discovery. As the court commented, "I think this is
out of the blue and such a stretch, it really is."

The next day, on redirect
examination, Matthews was again questioned regarding damages. Specifically, he was asked to describe Rick
Concrete's damages resulting from Wausau's bad faith in unreasonably delaying
payment on the policy, including the allegation that Rick Concrete was forced
to borrow money and sell equipment to raise cash. Wausau objected based on the court's exclusion
of evidence during the prior day's proceedings, and the court sustained those
objections. Outside the presence of the
jury, Rick Concrete's counsel argued that the types of damages suffered by the
company had been disclosed during discovery, but the trial court reiterated its
prior conclusion that no foundation had been laid connecting those damages to
Wausau's alleged wrongdoing.



Near the close of testimony, the
trial court again took up the question whether Wausau was justified in
commencing the declaratory relief action.
Concluding that the facts were undisputed and that this therefore was a
question of law for the court to decide, the trial court determined that Wausau
had good cause for bringing the declaratory relief action, and that doing so
was reasonable. After both sides rested,
Wausau moved for a directed verdict (1) on the claim that Wausau had wrongfully
commenced the declaratory relief action; and (2) on all the fraud and
misrepresentation causes of action. The
court directed a verdict against Rick Concrete on the first claim because it
already had ruled that Wausau had just cause for bringing that action. The court also directed a verdict against
Rick Concrete on the fraud and misrepresentation claims.

D. The
Jury's Verdict and Postverdict Proceedings

At the conclusion of the trial,
both parties proposed a special verdict form for the jury to use. The distinguishing feature of Wausau's form,
for purposes of this appeal, was the manner in which it addressed Wausau's
liability regarding the first party physical damage claim. Wausau's form first asked generally whether
Wausau "delayed payment to Rick Concrete for repairs to the Putzmeister
unit," and then asked generally whether that delay was "unreasonable
or without proper cause." Assuming
the answers to those questions were "yes," the form then posed
separate questions addressing Wausau's liability as to each of the two first
party payments—one asking whether Wausau had unreasonably delayed payment of
the initial $55,297.42 payment, and a second asking the same question as to the
$23,419 payment. Over Rick Concrete's
objection, the trial court adopted Wausau's proposed special verdict form.

On March 26, 2010, the jury
returned a verdict in Rick Concrete's favor.
It found that Wausau breached its insurance contract with Rick Concrete,
and also found that Wausau breached the covenant of good faith and fair dealing
by unreasonably or without good cause delaying payment on Rick Concrete's first
party physical damage claim. On the
specific questions regarding the two first party payments made by Wausau, the
jury found that Wausau unreasonably delayed the payment for $55,297.42, but not
the payment for $23,419.

The jury did not award damages
because the trial court and the parties earlier had agreed that the only
damages at issue after the court's rulings during the trial were >Brandt fees and prejudgment interest,
both of which were to be determined by the court. At the damages hearing held after the
verdict, the key disputed issue was the amount of Brandt fees to be awarded as a result of the jury's bad faith
verdict. Rick Concrete requested
$186,915 in fees, which took into account the time its counsel had spent
attempting to prove coverage under the policy during the declaratory relief action. Wausau, on the other hand, argued that Rick
Concrete was not entitled to recover those fees because the trial court already
had ruled Wausau was justified in seeking declaratory relief. The trial court, agreeing with Wausau,
awarded Rick Concrete only $195.00 in Brandt
fees. It also denied Rick Concrete
prejudgment interest on the delayed payments of the first party physical damage
claim, finding that the amount owed under the policy was not a liquidated sum,
as required by Civil Code section 3287, subdivision (a).

The trial court entered judgment on
July 1, 2010. Both Rick Concrete and
Wausau sought costs—the latter's request based on the fact that the value of
the judgment in Rick Concrete's favor exceeded an offer of compromise made by
Wausau pursuant to Code of Civil Procedure section 998 before the originally
scheduled trial date. The trial court
awarded costs to both parties, which resulted in an award of net costs to Rick
Concrete in the amount of $15,855.47.
The court denied Wausau's request for reimbursement of its expert
witness fees pursuant to Code of Civil Procedure 998, subdivision (c)(1), on
the ground that Wausau had not demonstrated the experts' work was reasonably
necessary for the conduct of the litigation.
Finally, the trial court denied Rick Concrete's motions for a new trial
and for judgment notwithstanding the verdict.

DISCUSSION

I



RICK CONCRETE'S
APPEAL



A. >The Trial Court Properly Directed a Verdict
on Rick Concrete's Fraud

and
Misrepresentation Claims



In its
appeal, Rick Concrete first contends the trial court abused its discretion in
excluding evidence of damages Rick Concrete claimed to have suffered as a
result of Wausau's alleged fraudulent conduct, and then, based on the lack of
such evidence, erroneously directed a verdict in favor of Wausau on the fraud
and misrepresentation claims. We need
not decide the evidentiary issue because we conclude that, even if the trial
court had permitted Rick Concrete to present the excluded evidence, directing a
verdict on the fraud and misrepresentation claims still would have been proper.

"[A] directed verdict is
properly entered when ' "the trial court determines that, as a matter of
law, the evidence presented by plaintiff is insufficient to permit a jury to
find in his favor." '
[Citation.]" (>Fariba v. Dealer Services Corp. (2009)
178 Cal.App.4th 156, 174.) We review a
directed verdict de novo. (>Ibid.)

The essential elements of a fraud
or misrepresentation claim include: (a) a misrepresentation; (b) knowledge of
its falsity; (c) intent to defraud (i.e., intent to induce reliance); (d)
justifiable reliance; and (e) resulting damage.
(5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 772, p.
1121 (Witkin); Civ. Code, § 1709.) Rick
Concrete had the burden of establishing each of these elements by a
preponderance of the evidence. (Witkin, >supra, § 769 at p. 1118.) It fell far short of satisfying its burden.

Rick Concrete's fraud allegations
arose from a September 4, 2007 letter written to Rick Concrete by Vicky
Hanneman, Wausau's claims adjuster assigned to investigate the February 2006
accident. More specifically, Rick
Concrete's claims focused on a small portion of that letter, where Hanneman
stated:

"[P]lease be advised that
although Wausau is defending this case on your behalf under a reservation of
rights, and has filed a Declaratory Relief Action regarding the coverage
issues, I am not involved in that. My
job continues to be, to investigate and resolve this case in a fair and
equitable manner based on the evidence of the case, and in the best interests
of Rick Concrete Construction."



Rick Concrete's president, Robert
Matthews, testified these representations lured him into a false sense of
security, and induced him to defer downsizing his company to save money (including
dropping insurance coverage of certain vehicles), in anticipation of what he
thought would be a forthcoming resolution of the first party claim. This delay in downsizing is what Rick
Concrete alleged caused its damages, and it would have been the subject of the
excluded testimony.

Initially, we observe that the
parties' briefing on this issue focused on the trial court's rationale for
directing a verdict on the fraud and misrepresentation claims. Rick Concrete contends that the trial court
rested its ruling solely on the absence of damages evidence, while Wausau
contends the trial court perceived a broader failure of proof. Wausau is correct. The trial court engaged in an extensive
colloquy with counsel regarding these claims, and initially was reluctant to
grant a directed verdict. It ultimately
concluded that discussion by noting that it had not allowed Rick Concrete's
evidence on fraud damages and "it would be inconsistent to then allow the
jury to speculate as to what those damages are.
[¶] So I'm going to grant the
directed verdict." Prior to that
comment, however, the trial court had pointed out other gaps in Rick Concrete's
proof of its allegations. For instance,
the trial court opined that there was no evidence that the statements misrepresented
anything, that Hanneman knew her statements were false, or that she had reason
to know Rick Concrete would rely on her statements to its detriment.

Although Wausau, in its brief,
argued that the directed verdict was appropriate for reasons other than the
absence of evidence on damages, Rick Concrete made no effort to respond to
those arguments in its reply brief. In
any event, even if we assume the principal basis for the court's ruling was its
exclusion of evidence regarding damages, we may affirm on any applicable legal
ground. (People v. Geier (2007) 41 Cal.4th 555, 582 ["[W]e review the
ruling, not the court's reasoning . . . .
' " 'If right upon any theory of law applicable to the case, it
must be sustained regardless of the considerations which may have moved the
trial court to its conclusion.' " ' "].)

During her trial testimony,
Hanneman testified that she understood Matthews was concerned that the process
of investigating Rick Concrete's claims was going slowly, and she attempted to
explain to him the obstacles she was confronting in completing her
investigation. She told him that
"we would continue to investigate and . . . try to get
the cases resolved." She testified
that she believed her "promise" in her letter to continue to investigate
was true, it was her intention to act in Rick Concrete's best interests, and
that is in fact what she tried to do.
She did not intend to mislead or deceive Rick Concrete by making those
statements, but acknowledged that at the time she was more focused on the third
party liability claim than on the first party physical damage claim. She also candidly acknowledged that she did
"very little, if anything," to investigate the first party claim. The thrust of her testimony was that Wausau's
investigation of the first party physical damage claim was neither swift nor
thorough.

Apart from
Matthews's and Hanneman's testimony, Rick Concrete identifies no other evidence
directly pertinent to the claim that the September 2007 letter constituted a
fraudulent misrepresentation on which Rick Concrete allegedly relied, and which
allegedly induced Rick Concrete to defer taking money-saving steps. The foregoing evidence, however, is
insufficient to satisfy Rick Concrete's burden of proof as a matter of
law. First, we conclude that the
statements in the September 2007 do not constitute misrepresentations. The unchallenged testimony is that the letter
accurately described Hanneman's responsibilities—i.e., it was, in fact, her job
to continue the investigation and act in Rick Concrete's best interests. Second, even if these statements could be
construed as a "promise" to do anything, in our view they do not
constitute a false promise, because
Hanneman testified she fully intended to do her job. Although she acknowledged that a thorough and
timely investigation on the first party claim ultimately did not occur, that
fact alone is insufficient to constitute fraud.
(See Witkin, supra, § 781
at pp. 1131-1132 [a promise made without any intention to perform it may
constitute fraud, but a "declaration of
intention . . . made in good faith, without intention to
deceive, and in the honest expectation that it will be fulfilled, does not
constitute fraud, even though it is not carried out"].) Nothing in Hanneman's testimony or any other
evidence presented at trial reasonably would have allowed the jury to conclude
that Wausau never truly intended to investigate the first party claim, based
merely on the fact that a proper investigation ultimately did not occur.









Third, there
is no evidence of scienter, or knowledge of falsity. As noted, Hanneman testified she believed her
statements to be true. She had no
intention of inducing Matthews' reliance on those statements to his detriment.href="#_ftn1" name="_ftnref1" title="">[1] Finally, taking as true Matthews's testimony
that he in fact relied on these statements, there is no evidence indicating
that Matthews was justified in doing
so. The only "promise"
Hanneman made was that she would continue the investigation and work to resolve
the claims in a "fair and equitable manner." Matthews certainly was justified in relying
on Hanneman doing exactly that, but she made no promises as to the ultimate
outcome of her investigation. Matthews could
not reasonably assume that the outcome necessarily would be that Rick Concrete
would receive all the policy benefits
it claimed, since Matthews knew the declaratory relief action had been filed at
the time he received Hanneman's letter, and Wausau was contesting
coverage. Accordingly, it would have
been foolhardy to rely on Hanneman's mere confirmation that the investigation
was continuing, as a reason to defer taking any cost-saving steps in the
interim.href="#_ftn2" name="_ftnref2" title="">[2]

In sum,
even without considering whether the trial court was within its discretion to
exclude evidence of fraud-related damages, the record shows that Rick Concrete
failed to adduce sufficient evidence to meet its burden of proving the other
elements of its fraud and misrepresentation claims. As the trial court remarked,
"Admittedly, the first party claim fell through the cracks," and the
jury concluded that Wausau breached its contract and unreasonably delayed the
initial first party payment. There
simply was insufficient evidence, however, to show that Wausau also
intentionally or recklessly misrepresented to Rick Concrete that it was
continuing to investigate its claims and act in its best interests, with the
intention that Rick Concrete rely on those statements to its detriment. In these circumstances, the trial court did
not err in directing a verdict on those claims.href="#_ftn3" name="_ftnref3" title="">[3]

B. >The Trial Court Did not Abuse its Discretion
in Excluding

Evidence of
Alleged Bad Faith Damages



Rick
Concrete also challenges the exclusion of certain evidence it contends would
have proved its damages resulting from Wausau's unreasonable delay in paying
first party benefits. The proffered
evidence concerned Rick Concrete's efforts to raise cash by selling equipment
and borrowing money. The trial court
excluded the evidence because Rick Concrete had not laid the necessary
foundation. We review the trial court's
exclusion of this evidence for abuse of discretion, and conclude there was
none. (Gordon, supra,> 170 Cal.App.4th at p. 1111; >Caira v. Offner (2005) 126 Cal.App.4th
12, 32.)

Only relevant evidence is
admissible. (Evid. Code, §§ 350,
351.) Evidence Code section 352 grants
the trial court broad discretion to exclude even relevant evidence "if its
probative value is substantially outweighed by the probability that its
admission will (a) necessitate undue consumption of time or (b) create substantial
danger of undue prejudice, of confusing the issues, or of misleading the
jury." (Evid. Code, § 352; >People v. Avila (2006) 38 Cal.4th 491,
578.) " 'The trial court has
broad discretion both in determining the relevance of evidence and in assessing
whether its prejudicial effect outweighs its probative value.' " (People
v. Jones (2011) 51 Cal.4th 346, 373.)
Additionally, the trial court may exclude evidence in its discretion if
it concludes the proponent has laid an insufficient foundation for that evidence. (People
v. Bacon (2010) 50 Cal.4th 1082, 1102, 1103; see also Evid. Code,
§§ 401-403.)

name="_GoBack">Rick Concrete's theory of damages resulting from Wausau's
bad faith is somewhat unclear.
Initially, it appeared that Rick Concrete contended it had lost business
revenue as a result of the declaratory relief action, which required Matthews
to take time off from work to assist his counsel with defending that
action. Wausau objected to Matthews's
proffered testimony on this matter because Rick Concrete had not previously
disclosed the relevant facts in discovery.
The court characterized this theory as "a stretch," and stated
he would not allow the testimony because there had been no foundation laid;
that is, there had been no "showing prior to trial quantifying the hours
spent and connecting those hours with loss of business." Nevertheless, the following day, over
Wausau's objection, the trial permitted Matthews to testify about how he had to
take time away from work to assist counsel with the declaratory relief
action. But Matthews gave no details
about specific revenues lost directly because of his missing work. Instead, he merely testified as to what he
would usually earn in a day of pumping concrete. Matthews was also questioned at trial about
having to sell equipment and borrow money as a result of Wausau's withholding
of policy benefits. The court did not
allow that testimony. Its reason for
excluding this evidence was lack of foundation, as had been discussed the prior
day. The trial court made clear that its
principal concern was that "there's just no connection between what Wausau
did and all of these amorphous . . . damages."

Rick Concrete now asserts that the
bad faith damage issues "had nothing to do with alleged loss business
claims." We assume by this
statement that Rick Concrete is limiting its claimed damages solely to its
efforts to sell equipment and borrow money to improve its cash flow when the
first party benefits were not paid promptly.
If that is the case, however, Rick Concrete still has failed to
demonstrate that it laid a proper foundation for Matthews's testimony on that
subject.

At trial,
Rick Concrete argued that the necessary foundation had been laid during
discovery. It submitted to the trial
court as an offer of proof some of its discovery responses and deposition
testimony relating to bad faith damages.
We agree with the trial court that this evidence was insufficient to lay
the necessary foundation. For example,
in response to interrogatories asking what bad faith damages it claimed, Rick
Concrete stated its damages included "loss of cash
flow, . . . was forced to sell equipment, [and] was forced to
mortgage a property." Nothing in
those answers specifically linked those claimed damages to Wausau's delay of
the first party benefit payments.

Matthews's deposition testimony on
this subject also shed no light on why he was required to raise these
additional sums specifically because of the delay of policy benefits. He testified as to items sold, property mortgaged,
and money borrowed from his mother; estimated the amounts involved; and stated
that his reasons for raising these monies were to "pay for attorneys'
fees" and "front some money for the geotechnical
[experts]." What is absent again,
however, is any testimony from which the jury could have determined that
Wausau's delay of the first party benefits was the specific reason why Rick
Concrete needed to raise these funds.
Thus, nothing in this testimony shows that the geotechnical experts were
needed for the bad faith trial, as opposed to the Guillen action. There was no
explanation as to how the attorneys' fees related to counsel's efforts to
obtain the first party benefits in particular, as opposed to other issues
arising from the accident.href="#_ftn4"
name="_ftnref4" title="">[4] Matthews also testified that to some extent
the money he raised from selling equipment was used "to keep the business
afloat." But this would appear to
relate only to claimed lost income resulting from the declaratory relief action,
which Rick Concrete now asserts is not part of its bad faith damages claim.

Given this
dearth of foundational evidence showing any causal connection between Wausau's
unreasonable delay in paying first party benefits and the alleged damages
suffered, we cannot conclude the trial court abused its discretion in
disallowing Matthews's testimony on this subject. At best, Matthews's testimony on bad faith
damages would require the jury to speculate about any such causal
connection. However, "exclusion of
evidence that produces only speculative inferences is not an abuse of
discretion." (People v. Babbitt (1988) 45 Cal.3d 660, 684.)

C. >The Trial Court Did not Err in Approving Use
of a

Special Verdict
Form Asking the Jury to Separately Determine

Wausau's Bad
Faith as to Each First Party Payment



Rick Concrete
next contends that the trial court erred in approving Wausau's special verdict
form that asked the jury to separately determine Wausau's bad faith liability
as to each of its first party physical damage payments to Rick Concrete. The use of that form, Rick Concrete argues,
resulted in a verdict that was illogical and inconsistent, when the jury found
that Wausau unreasonably delayed the first payment of $55,297.42, but did not
unreasonably delay the second payment of $23,419. "[A] special verdict's correctness is
analyzed as a matter of law and therefore subject to de novo review." (Zagami,
Inc. v. James A. Crone, Inc. (2008) 160 Cal.App.4th 1083, 1092.)

The gist of Rick Concrete's
argument is that there was no legal basis for departing from the recommended
special verdict format (i.e., CACI No. 2331) by asking separate questions
regarding the payments, because if the initial payment from Wausau was
unreasonably delayed, then, ipso facto, the second payment made over a year was
also unreasonably delayed. Furthermore,
Rick Concrete contends, Wausau had no basis for arguing to the jury that a
genuine dispute existed as to its liability prior to the time it made the
initial $55,297.42 payment, and thus, there was no basis on which the jury
could have found Wausau was justified in delaying making any part of the >full payment owed. These arguments are unpersuasive.

A verdict " 'should be
interpreted so as to uphold it and to give it the effect intended by the jury,
as well as one consistent with the law and the evidence.' " (All-West Design, Inc. v. Boozer
(1986) 183 Cal.App.3d 1212, 1223.)
Verdicts "are deemed inconsistent when they are 'beyond possibility of reconciliation under any
possible application of the evidence and instructions.' [Citations.]
'If any conclusions could be drawn thereunder which would explain the
apparent conflict, the jury will be deemed to have drawn them.'
[Citation.]" (Oxford v. Foster
Wheeler LLC (2009) 177 Cal.App.4th 700, 716; italics added.)

"Inconsistent verdicts are '
"against the law," ' and the proper remedy is a new trial." (Shaw
v. Hughes Aircraft Co. (2000) 83 Cal.App.4th 1336, 1344 [concluding jury's
finding there was no breach of contract was irreconcilable with finding that
defendant breached covenant of good faith and fair dealing].) " 'The inconsistent verdict rule is
based upon the fundamental proposition that a factfinder may not make
inconsistent determinations of fact based
on the same evidence.'
[Citations.]" (>City of San Diego v. D.R. Horton San Diego Holding
Co. (2005) 126 Cal.App.4th 668, 682, italics added; see also >Stillwell v. The Salvation Army (2008)
167 Cal.App.4th 360, 374 (Stillwell).)

The foregoing authorities
implicitly recognize that inconsistency in special verdict determinations
likely will not occur where separate determinations of fact are based on >different evidence. That is the case here. Rick Concrete's principal theory at trial
with respect to its first party physical damage claim was that Wausau had
failed to thoroughly and timely investigate that claim. The first payment of $55,297.42 was made over
three years after the accident occurred.
In light of all the evidence, the jury reasonably could have concluded—and
apparently did conclude—that this payment had been unreasonably delayed. The second payment, however, came about only
after a dispute subsequently arose on
an independent legal issue generated by the appraisal, namely, whether Wausau's
liability was not for the actual costs of repair, but the reasonable costs of
repair. The appraisal unusually resulted
in two different amounts for which Wausau possibly could be liable, but did not
determine which of the two was the appropriate sum. That issue was not settled until the trial
court ruled, just before the bad faith trial commenced, that Rick Concrete was
entitled as a matter of law to recover the higher sum reflecting the reasonable
costs of repair. Wausau paid the balance
owed the day after the trial court's decision.
The jury reasonably could conclude—and again, apparently did—that under
these facts, Wausau did not unreasonably delay in making the second payment.





The facts
and circumstances surrounding the two separate payments therefore were quite
different. Rick Concrete cites no
authority for the proposition that the trial court may not use a special
verdict form asking the jury to separately determine an insurer's bad faith
liability arising from separate first party payments, when the evidence
relevant to those respective payments is different. As noted previously, the applicable case law
indicates that the procedure used by the trial court here was appropriately
tailored to the evidence. (See >Stillwell, supra, 167 Cal.App.4th at p. 374 [stating factfinder may not make
independent determinations based on the same
evidence]; see also Wysinger v.
Automobile Club of Southern California (2007) 157 Cal.App.4th 413, 424 [in
disability discrimination lawsuit, there was no inconsistency in the verdicts
on the reasonable accommodation and interactive process claims, where they
involved "separate causes of action and proof of different facts"].)href="#_ftn5" name="_ftnref5" title="">[5]

Rick Concrete insists, however,
that because the jury found the first payment was unreasonably delayed, and the
second payment was made over a year after the first payment was made, that jury
necessarily was required to find that
the second payment was also unreasonably delayed. This argument, however, disregards the
factual differences we have just summarized underlying the two payments. It is not enough for Rick Concrete to assert
that Wausau's bad faith liability inexorably extends to the second payment
merely because it was made later in time.
Rather, Wausau's liability for the second payment depends on whether
Wausau was justified in questioning its liability for the reasonable costs of
repair, rather than just the actual costs of repair incurred by Rick Concrete,
and in seeking an appraisal and judicial resolution of that issue. In other words, did a genuine dispute exist
as to its liability for the additional sum Rick Concrete claimed to be owed
under the policy? (See >McCoy v. Progressive West Ins. Co.
(2009) 171 Cal.App.4th 785, 793 (McCoy)
[" 'Where there is a genuine issue
as to the insurer's liability under the policy for the claim asserted by the
insured, there can be no bad faith liability imposed on the insurer for
advancing its side of that dispute.' "]; Rappaport-Scott v. Interinsurance Exchange of the Automobile Club
(2007) 146 Cal.App.4th 831, 837 ["In a first party
case . . . the withholding of benefits due under the policy
is not unreasonable if there was a genuine dispute between the insurer and the
insured as to coverage or the amount of
payment due." (Italics
added.)].)

Rick Concrete posits two reasons
why no such genuine dispute existed.
First, it suggests that for the "genuine dispute" doctrine to
apply, any such dispute had to have arisen prior to the first payment made. Rick
Concrete fails to explain why this must be so.
It is entirely tenable, in our view, that the jury would find a genuine
dispute existed as to the second payment, but did not exist as to the first,
because the contested issues were different as to each payment. As explained earlier, although the evidence
regarding the first party payments focused generally on the question whether
Wausau failed to fully and timely investigate the first party physical damage
claim, the evidence as to the second payment focused more specifically on the
legal dispute regarding the extent of Wausau's liability, a dispute that
crystallized only after the first payment was made and the appraisal results
were issued.

Rick Concrete also contends that
Wausau failed to raise any genuine dispute because it presented no expert
testimony supporting its contention it was liable only for the actual costs of
repair. Fraley v. Allstate Ins. Co. (2000) 81 Cal.App.4th 1282, cited by
Rick Concrete, does not create such an ironclad rule. In Fraley,
this court observed that the "genuine dispute" doctrine ">may be applied where the insurer denies
a claim based on the opinion of experts."
(Id. at p. 1292, italics
added.) It does not hold that the
doctrine may be invoked only based on
such an opinion. We also note that in
one of the cases we cited in Fraley,
the court's holding that the disability insurer had acted reasonably, if
incorrectly, in denying disability benefits, was not based on any expert's
opinion. (See Austero v. National Cas. Co. (1978) 84 Cal.App.3d 1, 23, 33-36
[although court held disability benefits were properly awarded by jury, it
found as a matter of law that insurer had not acted unreasonably in denying
benefits based on evidence that insured had continued to work despite claimed
disability]), disapproved on other grounds in Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 824, fn.
7.)

In this case, Wausau presented
undisputed evidence that after the appraisal award, which presented two
different values for the costs of repair, Wausau obtained outside legal advice
in an effort to determine which sum it ought to pay—advice on which it relied
in denying Rick Concrete's claim to the larger amount based on the reasonable
costs of repair. The letter sent to Rick
Concrete by Wausau's counsel set forth legal authority he argued supported
denial of the higher amount the appraisers found would have been a reasonable
cost had Rick Concrete used an outside vendor to repair the Putzmeister
equipment. Rick Concrete cites to no
evidence in the record suggesting that Wausau's reasons for not paying the
larger amount immediately were merely pretextual. It is also undisputed that Wausau issued a
second check to Rick Concrete one day after the trial judge determined Rick
Concrete was entitled to the larger amount.

We conclude that the trial court's
use of a special verdict form asking the jury to make separate determinations
regarding each of the first party physical damage payments was warranted and
appropriate given the different facts and circumstances underlying these
payments.

D. >Substantial Evidence Supports the Jury's
Verdict Finding Wausau Did Not Unreasonably Delay the $23,419 First Party
Physical Damage Payment

>

Rick Concrete also contends that
there is no substantial evidence supporting the jury's determination that
Wausau did not unreasonably delay the $23,419 payment. It challenges this part of the jury's verdict
on the same grounds it challenged the special verdict form: (1) if the first payment was unreasonably
delayed, the second, later payment necessarily was also unreasonably delayed,
and (2) Wausau presented no expert opinion supporting the application of the
"genuine dispute" doctrine. We
have already identified the flaws in these arguments, and the same analysis
applies here. The law is clear that an
insurer cannot be liable in bad faith where its position in denying a claim is
reasonable and based on a genuine dispute.
(Wilson v. 21st Century Insurance
Co. (2007) 42 Cal.4th 713, 723; McCoy,
supra, 171 Cal.App.4th at p.
793.) Rick Concrete does not identify
any evidence that Wausau's reasons for not paying the additional $23,419
immediately upon Rick Concrete's demand were merely pretextual. Accordingly, substantial evidence supports
the jury's determination that Wausau's second payment, made after appraisal and
a judicial determination that it was owed, was not in bad faith.href="#_ftn6" name="_ftnref6" title="">[6] (See Bowers
v. Bernards (1984) 150 Cal.App.3d 870, 873 [substantial evidence is
evidence that is " 'of ponderable legal
significance . . . reasonable in nature, credible, and of
solid value,' " italics omitted].)

E. >The Trial Court's Award of $195 in Brandt
Fees

Conforms with
Applicable Law



After the
verdict was issued, Rick Concrete sought $186,915 in Brandt fees. This request
included attorney fees Rick Concrete had incurred in defending the declaratory
relief action. Wausau argued that Rick
Concrete could not obtain such fees when the trial court had already held the
declaratory relief action was not brought in bad faith. The trial court agreed, and awarded Rick
Concrete just $195 in Brandt fees,
attributable to the time spent by counsel exchanging correspondence with Wausau
that ultimately led to the first payment of first party benefits.





We generally
review the award of such fees for abuse of discretion. (See Cassim
v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 805 (Cassim).) A trial court
abuses its discretion if it awards Brandt
fees not supported by substantial evidence, or misconstrues applicable legal
criteria. (Ibid.; see also Yield
Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 577
["A request for an award of attorney fees is entrusted to the trial
court's discretion and will not be overturned in the absence of a manifest
abuse of discretion, a prejudicial error of law, or necessary findings not
supported by substantial evidence."].)

Since >Brandt, it has been well settled that
attorney's fees reasonably incurred to compel payment of policy benefits are
recoverable as an item of damages in an insurance bad faith case. (Cassim,
supra, 33 Cal.4th at p. 806; see >Brandt, supra, 37 Cal.3d at p. 817.)
However, the California Supreme Court has placed certain critical
limitations on the recovery of Brandt
fees, which is an exception to the "American rule" generally
requiring each party to a litigation to pay its own attorney's fees. (Cassim,
supra, at p. 806.) First, this exception is intended to be a
limited one, and the insured may recover only those fees "attributable to
the attorney's efforts to obtain the rejected payment due on the insurance
contract." (Brandt, supra, at p.
819.) Second, an essential premise for
allowing recovery of such fees is that the insurer's bad faith
"proximately caused damages" in the form of requiring the insured to
hire counsel to obtain the rejected policy benefits. (Cassim,
supra, at p. 806, citing >Brandt, supra, at p. 817.) Third,
although tortious (i.e., bad faith) conduct by the insurer is a prerequisite to
an award of Brandt fees, only those
fees incurred to obtain benefits under the insurance contract—not fees incurred
to prove the insurer's bad faith—are recoverable. (Cassim,
supra, at pp. 806, 811.) Accordingly, if, as is often the case, the
attorney's efforts to obtain contractual benefits and to prove bad faith
overlap, "the trial court should exercise its discretion to apportion the
fees." (Id. at p. 811.)

Wausau
brought the declaratory relief action to determine coverage for purposes of the
third party claim (i.e., the Guillen
action). Although Rick Concrete's
cross-claims encompassed both the Guillen
action and the first party physical damage claim, its cross-claims were severed
from the declaratory relief action. Once
the trial court determined Wausau reasonably had brought the declaratory relief
action, only the first party physical damage claim remained to be tried. The evidence at trial of Wausau's bad faith
focused on Wausau's failure to timely and thoroughly investigate that
claim. Rick Concrete proved Wausau's bad
faith only as to the initial first party payment.

Rick Concrete argues that it could
not segregate the fees it incurred in defending the declaratory relief action
from those incurred by its counsel to obtain first party benefits under the
policy, because these efforts were "inextricably intertwined."href="#_ftn7" name="_ftnref7" title="">[7] In other words, Rick Concrete argues, it
could not obtain the first party benefits unless it first established during
the declaratory relief action that
the Putzmeister vehicle was a covered "auto." As a practical matter,
it is true that determining whether the vehicle was a covered "auto"
under the policy was essential to obtaining first party physical damage
benefits, but that is not the dispositive inquiry under Brandt. In our view, the
problem with Rick Concrete's position is not its failure to apportion fees
between those that are recoverable under Brandt
and those that are not. Rather, the
problem is that Rick Concrete has not shown the fees it incurred in connection
with the declaratory relief action were incurred because of Wausau's bad faith.

It is undisputed that only those
fees incurred to obtain policy benefits Wausau unreasonably denied or delayed
are recoverable. (Brandt, supra, 37 Cal.3d
at p. 817 [recoverable fees are, in essence, damages "proximately
caused" by insurer's failure to discharge its responsibilities under the
insurance contract in good faith].)
Critically, however, the trial court held that Wausau did not bring the
declaratory relief action in bad faith, and Rick Concrete has not appealed that
ruling. Because the trial court
determined that Wausau had proper cause to prosecute the declaration relief
action, the fees Rick Concrete incurred in defending that action were not
"proximately caused" by any bad faith on Wausau's part, and thus are
not recoverable. (Ibid.)

In light of that ruling, the only
fees Rick Concrete may recover are those attributable to its counsel's efforts
to obtain first party benefits, and in particular, the efforts associated with
obtaining the initial $55,297.42 payment, because only in connection with that
payment did the jury find Wausau acted in bad faith. It bears noting that Rick Concrete points to
no evidence in the record establishing any causal link between Wausau's proven
bad faith (with regard to one of the first party payments) and the fees Rick
Concrete incurred in defense of the declaratory relief action brought to determine
coverage for the third party liability claim.
As we have explained, it is not enough for Rick Concrete simply to argue
that establishing coverage was a necessary prerequisite to obtaining first
party benefits. That is always the
case. The only situation in which the
law allows recovery of Brandt fees is
when hiring counsel to prove coverage and obtain benefits is the proximate
result of the insurer's bad faith—a critical fact Rick Concrete was unable to
prove as to attorney's fees incurred in connection with the declaratory relief
action. Accordingly, the trial court did
not abuse its discretion in awarding Rick Concrete $195 in Brandt fees.href="#_ftn8"
name="_ftnref8" title="">[8]

F. The
Trial Court Erred in Denying Prejudgment Interest on the $23,419 Payment

Finally,
Rick Concrete contends the trial court improperly denied its request for
prejudgment interest on the second first party payment, from the date the
appraisal results were issued to the date of judgment. The trial court denied
prejudgment interest because, in its view, the $23,419 was not a liquidated
sum, as required under Civil Code section 3287, subdivision (a).href="#_ftn9" name="_ftnref9" title="">[9]

As we explained in >Wisper Corp. v. California Commerce Bank
(1996) 49 Cal.App.4th 948:

" 'The test for recovery of
prejudgment interest under [Civil Code] section 3287, subdivision (a) is
whether defendant actually know[s] the amount owed or from reasonably
available information could the defendant have computed that amount.'
. . . 'The statute [Civil Code section 3287] does not
authorize prejudgment interest where the amount of damage, as opposed to the
determination of liability, "depends upon a judicial determination based
upon conflicting evidence and is not ascertainable from truthful data supplied
by the claimant to his debtor." ' [Citations]
. . . Thus, where the amount
of damages cannot be resolved except
by verdict or judgment, prejudgment interest is not appropriate."



(Id. at p. 960;
see also Stein v. Southern Cal. Edison Co. (1992) 7 Cal.App.4th 565, 573 (Stein) ["Where the amount of damages cannot be resolved except
by account, verdict or judgment, interest prior to judgment is not
allowable."].)

As these cases illustrate, the
uncertainty that compels denial of prejudgment interest is uncertainty as to
the amount of damages, not as to
whether the damages are owed (i.e., liability). Thus, in Olson v. Cory (1983) 35 Cal.3d 390, the California Supreme Court
reversed a denial of prejudgment interest on class members' salary and pension
increases which had been awarded to them in a prior decision. Defendants claimed that these damages were
not certain or capable of being made certain until the Supreme Court resolved
in its earlier decision who was entitled to a payment and how much was
owed. (Id. at p. 402.) The court
disagreed. "[T]he certainty required of Civil Code section 3287,
subdivision (a) is absent when the amounts due turn on disputed facts, but not
when the dispute is confined to the rules governing liability." (Ibid.) In Olson,
the court held, the amount due to each member of the class was "either of
two readily calculable amounts," depending on whether the original or
amended version of the relevant statute was applicable. (Ibid.) "The question whether to pay any [class
member] under one version of the statute or the other did not depend on any
factual uncertainty or dispute but solely on the proper answers to the
questions of law ultimately resolved [in the prior decision]. "Uncertainty over those legal issues did
not prevent the amounts due from being 'certain or capable of being made certain
by calculation.' " (>Ibid.; see also Stein, supra, 7
Cal.App.4th at p. 572 ["Denial of liability on the main theory does not
make the damage uncertain within the meaning of section 3287."].)

Similarly, in Credit Managers' Ass'n of Southern California v. Brubaker (1991)
233 Cal.App.3d 1587, plaintiff, who had been assigned the assets of an
insolvent partnership, had sent defendant, the chief executive officer of the
partnership, a letter demanding return of a specific sum representing transfers
he had received allegedly in preference over other secured creditors. (Id.
at p. 1590.) When payment was not made,
plaintiff filed a complaint, and the jury ultimately awarded the exact amount
plaintiff had demanded from defendant.
The trial court, however, denied prejudgment interest on that
amount. (Id. at p. 1595.) The
appellate court reversed, holding that defendant knew the exact amount due as a
result of plaintiff's demand letter, and thus, plaintiff was entitled to
interest from that date. (>Ibid.)
The fact that defendant had denied liability on plaintiff's main theory
did not render the damages uncertain within the meaning of the statute. (Ibid.)

This case is analogous to both >Olson and Credit Managers. As in >Olson, Wausau knew, as of the date the
appraisal results were issued, that it was liable for one of the two sums
listed in the appraisal. Thereafter,
Wausau did not dispute those numbers or
how they were calculated. Rather,
Wausau disputed whether it was legally obligated to pay the larger number (representing
the reasonable costs of repair) rather than the smaller number (representing
Rick Concrete's actual costs of repair).
That was not a factual question, as Wausau now insists, but a purely
legal one, as Wausau emphasized repeatedly to the trial court in its effort to
convince the court that it, and not the jury, should decide the issue. Ultimately, the trial court ruled that Wausau
was liable for the reasonable costs of repair.
As in Olson and >Credit Managers, the fact that Wausau
disputed its liability for the additional $23,419 does not render the >amount of damages uncertain.

It is also entirely beside the
point that, as Wausau argues, the jury found Wausau did not act in bad faith
with respect to the second payment. The
jury found that Wausau breached its contract with Rick Concrete "by
failing to properly pay for Rick Concrete's equipment damage claim." That breach of contract alone entitles Rick
Concrete to an award of prejudgment interest, because section 3287, subdivision
(a) requires payment of such interest to "[e]very person who is entitled
to recover damages certain, or capable of being made certain." (Civ. Code, § 3287, subd. (a); see
Wegner et al, Cal. Practice Guide: Civil
Trials and Evidence (The Rutter Group 2011) ¶ 17.179, p. 17-141 (Wegner)
[prejudgment interest commonly awarded on contract claims for liquidated
amounts].) The interest runs from the
date of the appraisal report (Sept. 22, 2009) to March 16, 2010, when Wausau
paid the additional $23,419—for a total of $1,123.50 in prejudgment interest
($6.42 per day, over 175 days). (See >North Oakland Medical Clinic v. Rogers
(1998) 65 Cal.App.4th 824, 828 [interest begins to accrue when there is both a
breach and a liquidated amount]; Wegner, supra,
¶ 17.177, at p. 17-141, and ¶ 17.185, p. 17-145 [same].)href="#_ftn10" name="_ftnref10" title="">[10]

II

>WAUSAU'S CROSS-APPEAL

A. Substantial
Evidence Supports the Trial Court's Determination of Coverage

1. Standard of Review

In its cross-appeal, Wausau
challenges the trial court's ruling in the declaratory relief action that the
February 2006 accident fell within the coverage